Volvo and Mitsubishi trucks wed

Volvo and Mitsubishi Motors Corporation have signed a final agreement covering the establishment of a strategic alliance between the companies, following a letter of intent announced in October.

14 December 1999Bob Jennings

Volvo and Mitsubishi Motors Corporation have signed a final agreement covering the establishment of a strategic alliance between the companies, following a letter of intent announced in October.

The agreement is to form a "strategic alliance" between the companies covering market, product and industrial cooperation in the manufacture and distribution of trucks and buses.

Under the agreement Mitsubishi will form a new truck and bus subsidiary in which Volvo will hold an ownership interest and as a first step toward forming this subsidiary, Mitsubishi will establish an internal division for its truck and bus operations not later than April next year.

In a second step, not later than year-end 2001, Mitsubishi will have formed a subsidiary that will include Mitsubishi's total operations for development, production and marketing of trucks and buses.

Volvo will acquire 19.9 percent of the shares in this subsidiary.

There will be joint development of the next generation of medium-duty trucks, and purchasing of components for these products, as well as exchange of information about future technologies and sharing of heavy duty components.

There will be regional cooperation in Asia, South America, Australia and New Zealand, as well as increased sales of Mitsubishi's light trucks through Volvo's distribution network in Europe.

Mitsubishi Motors' truck and bus sales represent about 25 percent of the company's total operations, with cars accounting for most of the remainder of sales.

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